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CAPITAL FUND
Giving Creatively to Taft
Planned gifts offer the advantages of additional income to the donor and tax savings, as well as the satisfaction of making a gift to Taft.
An Outright Gift of cash, appreciated property, such as stocks, bonds, or real estate, life insurance, or tangible personal property, such as art and jewelry, provides immediate support to the School. Donors are eligible for a charitable deduction and may avoid capital gains taxes and estate taxes.
A Bequest is the simplest kind of planned gift. A donor who makes a provision for Taft in his or her will may provide for an unrestricted legacy, permitting the Board of Trustees to allocate proceeds as best serves the needs of the School. Bequests may also be restricted to provide an endowment fund in support of a particular program, such as financial aid for students, faculty compensation, the library, the arts, or athletics.
A donor may also include a provision in his or her will bequeathing part or all of the assets of an IRA, Keogh, or qualified pension or profit sharing plan. Such a bequest may dramatically reduce income and estate tax obligations. Through a variety of Life Income Gifts, donors can contribute an asset and receive income for life. Donors can avoid paying capital gains tax, and income payments are based on the full market value of the asset when given. In many cases, donors can convert appreciated securities with a low yield to a substantially increased income stream. Estate tax benefits are also possible, and a donor may name his spouse and/or children as lifetime income beneficiaries. Such gifts also generate an immediate income tax deduction. Here are some of the types of life income gifts donors have made to Taft:
A gift to Taft's Pooled Income Fund, managed by State Street Bank, provides a variable rate of lifetime income. The fund's target is a six- percent rate of income.
Taft issues Gift Annuities paying a fixed dollar amount quarterly for life, with income rates based upon the age of the donor and any other income recipients. Annuity payments may begin when the gift is made or may be deferred to provide a higher rate of return in later years.
A Charitable Remainder Trust provides a donor professional asset management and lifetime income. There are two types. The type of trust referred to as a Unitrust allows the donor to select an income rate of five percent or more. Quarterly payments are determined by the fair market value of the trust and offer the possibility of income growth over a period of years as the trust appreciates in value. An Annuity Trust is a common variant which pays a fixed amount of income quarterly for the lives of the trust's beneficiaries. Some donors have, for example, found appeal in the prospect of using a second home having a low cost basis as the asset to fund a remainder trust paying an attractive rate of income to themselves and/or their children.
Alternatively, a donation of a Retained Life Estate allows a donor to make a gift of a personal residence, condominium, farm, or vacation home and continue to use and enjoy the property for life. Such a gift generates a current income tax deduction for the donor, which is based on the value of the gift that Taft will eventually receive.
A Charitable Lead Trust pays annual income to Taft for a term of years. At the end of this period, the assets then held by the trust revert back to the donor and/or designated beneficiaries such as children and grandchildren. Although the trust does not generate an income tax deduction, donors may realize significant estate and gift tax savings.
For more information about the advantages of making a planned gift or other creative ways to support Taft,
please contact Chip Spencer '56, Planned Giving Consultant, or Chris Latham, Director of Development, at 1-800-959-TAFT.
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